Government to import 200,000 tons of rice

Zakki P. Hakim, The Jakarta Post, Jakarta

Indonesia will import 200,000 tons of rice starting next month, to increase domestic supply until the end of the year in anticipation of higher demand ahead of fasting month of Ramadhan and Idul Fitri holidays, a minister said.

The importation will be handled by the State Logistics Agency (Bulog).

"Our target is actually to stabilize local rice prices by securing a sufficient national stock," Minister of Trade Mari E. Pangestu said on Friday after a meeting with the Vice President.

She estimated that the current national rice stock stood at around three million tons, of which 1.6 million tons were held by Bulog, the government's commodity regulator.

The government decided to give Bulog the import permit so it could maintain its stock to above one million tons until the end of the year, because it is also tasked with running the rice for the poor (Raskin) program.

Under the program, Bulog will sell rice to registered poor families at a subsidized price with the current volume at around 180,000 tons per month.

Mari quickly added that the rice import would be very small, relatively, in terms of volume. "In fact it would be the smallest volume of rice ever that we have imported in past 20 years."

She reiterated that only Bulog would be allowed to import rice, but the imported rice would not be released on the domestic market, unless local rice prices went above Rp 3,500 (34 U.S. cents) per kilogram.

The government, in late June, extended the rice import ban until the end of this year, under a condition that the ban would be lifted if the average price (HET) of medium-quality rice went over Rp 3,500 and Bulog's rice stock declined to below one million tons.

The government initially imposed the import ban from January 2004 to July 2004, then extended it in August of that year until the end of 2004, due to expectations of robust domestic output.

In December 2004, the government extended the ban to June 2005 due to official assessments of sufficient stocks and a good rice harvest.

The ban applies to only indigenous rice varieties and does not block imports of those types of rice that are not locally produced.